UPDATE – Congress Acts to Outlaw Home Resale Fee

Photo (cc) by chris.corwin

A few weeks ago, we did a story regarding a proposed 1 percent transfer fee that would enrich developers and apply for 99 years whenever certain houses were sold – by far the most unfair, outrageous and hostile fee I’ve seen in years. If you didn’t see that story, check it out by clicking the link above. If you did, here’s the latest news…

Following is part of a press release from the Coalition to Stop Wall Street Home Resale Fees:

WASHINGTON – The Coalition to Stop Wall Street Home Resale Fees applauds Congresswoman Maxine Waters and Co-Sponsors Sherman, Sires, and Gwen Moore for introducing the Homeowner Equity Protection Act of 2010 to ban private transfer fees and protect consumers from a new predatory scheme that forces homeowners to pay for the right to sell their own properties.

“We applaud Congresswoman Waters and the bill’s co-sponsors for introducing a powerful bill today that will protect consumers from predatory transfer fees that depress home prices and steal equity from homeowners,” said Kurt Pfotenhauer, CEO of the American Land Title Association. “This bill is an important step in enhancing consumer protections against these for-profit fees and safeguarding our already fragile real estate market from further abuse.”

Manhattan-based Freehold Capitol Partners is leading the push to add these fees to home purchase contracts. The fees require that a percentage of the final sale price of a home be paid to a private third party every time the property is sold, typically for 99 years. Freehold is attempting to then sell the right to collect these fees on Wall Street—all the while padding investors’ pockets while stealing equity from homeowners.

To date, 18 state legislatures in Arizona, California, Delaware, Florida, Hawaii, Illinois, Iowa, Kansas, Louisiana, Maryland, Minnesota, Mississippi, Missouri, North Carolina, Ohio, Oregon, Texas and Utah have recognized the dangers of Wall Street Home Resale Fees and have restricted their use. On the federal level, the Federal Housing Finance Agency has issued a guidance that would prevent Fannie Mae, Freddie Mac, and the Federal Home Loan Banks from investing in mortgages with these fees.

So it looks like this stupid idea is dying the death it deserves – but it’s not over yet. Now we’ll see if there’s anyone in Congress that could possibly find a reason to vote against legislation that serves the interests of virtually every prospective homeowner in America.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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